Are Indians Really Trading in Their Whisky for Wine?

SB VEDA

Last fall, LVMH—the French luxury conglomerate responsible for Louis Vuitton, Fendi, and Bulgari—threw a major, booze-soaked high fashion event. But instead of the customary champagne-filled soiree in a European castle, LVMH gathered Bollywood’s best to celebrate their subsidiary, famed champagne house Moët & Chandon, in a lavish Mumbai hotel. The unusual occasion—a launch party for their foray into the fledgling world of Indian wine.

Indians rank among the lowest wine consumers in the world. Even though the industry has blossomed in the last decade, growing from six to 50 domestic wineries, persistent social stigmas hamper further progress. Only a third of Indians drinks alcohol; those who do like to stick to harsh, local Indian spirits.

Still the statistics seem to be in flux. Wine consumption expected to increase by 73% by 2017, according to a new industry-released report.

According to new figures released by the Britain-based International Wine and Spirit Research, Indian consumers are predicted to tip back 2.1 million cases in 2017, up from 1.21 million cases from 2013, reported The Indian Express.

One case equals nine litres of wine.

According to Vinexpo, the growing consumption of wine in India can be traced to a burgeoning economy and a rising upper-middle class, travel to the West, and domestic production of local wines – all similar factors observed in China, where wine carries a level of cachet.

Like Chinese drinkers, Indian consumers are also more likely to order a glass of Cabernet Sauvignon or put a bottle of Syrah on their dinner table, as 61% of wines consumed in the country are reds – a segment that’s also expected to grow by 72% between 2013 and 2017.

India is 11th biggest wine consuming country in Asia-Pacific.

In total, Indians are predicted to drink 1.15 million cases of red wine and 0.63 million cases of white wine by 2017.

The same report also predicts growth in the spirits industry, with consumption in India expected to increase 20% between 2013 and 2017.

Driving the growth are spirits like brandy and Scotch whisky.

The latest forecast is expected to make India the fourth largest spirits importer in Asia by 2017, overtaking Thailand.

So, it is little wonder that a nascent wine industry is beginning to thrive on the gentle sloping hills of the Maharashtra region, near the Hindu holy city of Nasik.
For centuries, these hillsides have nurtured microclimates with hot days, cool nights, and reliable rainfall ideal for table grapes. But India has only recently tried to cash in on its potential as a South Asian Little Tuscany.

In the shadows of Mumbai’s skyscrapers, workers clocking out from a dairy factory duck into a grungy neighborhood bar. Here, local “whiskey” reigns supreme—distilled from molasses and smelling like varnish, it’s the only thing on tap. Before I can pull up a stool, a toothless man hands me a glass. Soon, nine new friends cluster around, and I bring up the subject of wine. Only one person has ever tried it. He makes a face and says, “Too sour.”

For the enthusiast looking to get serious about Indian wine, the unquestioned first stop is Sula Vineyards. Here in 1993, Rajeev Samant, a Stanford-educated Silicon Valley dropout, returned to his family’s humble estate to explore why the region’s profitable table-grape industry had never expanded to include wine grapes. Six years later, he planted the country’s first sauvignon blanc and chenin blanc grapes. From the paltry initial batch of 1,000 liters, Sula has grown into an empire producing 6 million liters of nearly two-dozen varietals in 2012.

The 35-acre estate has two restaurants, an outdoor bar, and a 32-room resort. I admire Samant’s ambitious effort to try to jump-start wine tourism in India. But as I sit down to dinner at Sula’s Indian restaurant, I watch the two men seated next to me look at the menu perplexed, then order coconut juice. When the waiter informs them that coconut juice is not on the menu, they both order local Indian whiskey instead.

This is the market battle Sula has waged for more than a decade. The best hope for wineries like Sula is to lure some of India’s 300 million whiskey consumers away from the varnish-liquor. But that is no small task: Eight out of the 10 best-selling whiskeysin the world are from India, with most of them only sold domestically.

The waiter begrudgingly places the men’s order but not before a bit of gentle ribbing. “Why don’t you walk to a wine shop for that whiskey!” the waiter teases. In working-class restaurants in India, BYO-whatever is customary. The words wine shop in the West might conjure images of sleekly minimal design, but the reality in India is quite different. Wine shops are dusty, government-run affairs that dole out whatever they have in stock—usually some concoction of fermented molasses.

Though challenges abound, converting die-hard whiskey drinkers into wine drinkers may be in the best interest of all of India. As the country continues to guzzle booze made popular under colonialism, the sugarcane factories that supply its molasses continue to deplete the country’s water resources. While introducing moresustainability into India’s farms, the Nasik region’s vineyards also aim to prop up a steady, long-term industry by cultivating a fruit with an ancient history.
Education and marketing are the best hopes in the uphill battle to get Indians to drink wine.

I meet Prashant Bhalerao, a hospitality manager, as he is finishing a tour and pulling glasses to do a tasting for a married couple visiting from Andhra Pradesh. As he pours a glass of his award-winning sauvignon blanc, his eyes light up. He patiently teaches the couple how to hold their glasses and thoughtfully responds to questions like, “Which white and red do you mix to get rosé?”

But he starts to lose the visitors as we move on to sample the reds. Grimaces and trips to the spittoon abound. “Too sour?” Bhalerao asks the husband, as he spits a shiraz. “It tastes like cough medicine,” the man replies.

While Sula boldly declares itself to be “at the forefront of the Indian wine revolution,” smaller wineries like York, just a few hills over, have to produce a particular blend to suit Indian taste:

That means sweet. “Wine in India has two problems: People like to get drunk, and people like sugar,” Vishal Mahajan, a former winemaker from Sula tells me.

Sula’s vineyards during the October pruning season.

Leaning against a balcony overlooking an unpretentious 6-acre estate, we taste York’s late-harvest chenin blanc. York produces far less wine than their neighbors down the road, but sipping on their saccharine chenin, with its notes of guava and a lingering taste of honey, it’s clear that they’re playing to the base. As we pour another glass, I ask Mahajan about the darker of India’s two alcohol vices—a propensity for drinking too much.

India is only beginning to try to cash in on its potential as a South Asian Little Tuscany.

“I’ve heard some wineries talk about increasing the alcohol volume to 20 percent,” Mahajan says. With the Indian liquor marketreleasing special editions of high-alcohol booze, the wine industry is feeling the pressure to compete. As we leave the tasting room, one sommelier shows us a Marathi meme floating around the Internet. It states that it takes an hour of drinking wine to speak English but only a few minutes of local whiskey to accomplish the same task. “At university, our parties only had whiskey. Maybe only 5 percent of the people knew about wine,” the sommelier laughs. A member of India’s glut of MBA graduates, he hopes to help expand the country’s drinking frontiers.

About 20 miles south, near the serene Mukhne Dam, I meet two young winemakers, Sanket Gawand and Asmita Pol, at Vallonné Vineyards. Founded in 2009, Vallonné produces a fraction of the wine made by other vineyards. “We want to be known as India’s premier boutique winery,” Pol says. With a lower percentage of contract farming than other area wineries, Vallonné is able to keep a more watchful eye on their crop rather than deploy viticulturalists to check on far-flung farms.

A small upstart, Vallonné has the freedom to make bold choices—like experimenting with different oak barrels, a risk for such a small crop. But who is their market?

“My generation. We pursue what we like and what we want,” Gawand smiles.

The youth may be the most promising target for India’s nascent wine industry, but the lingering concern among the homegrown wineries is what effect the introduction of foreign names—like the sparkling wine of Moët & Chandon—will have on domestic production. India’s young people have a huge appetite for luxury products, but it’s unclear whether they like luxury products made in India.

Still, India being a price sensitive and multi-layered market in goods of all types is more likely than most to develop a cheap domestic segment, once consumers develop the taste for it.

It is still more promising if wine can be marketed a health drink. With arterial disease at an all-time high, the curative properties of the flavonoids in the skin of grapes, which become absorbed in the alcohol and concentrated, may hold out promise for a rally among those who are averse to boozing.

“Just put the drink in the hands of a few Bollywood icons, and watch the glasses clink,” says Food and Beverage analyst Malcom Duncan McDowell of glbtrade.ca.

Indeed.